Oil edged higher following a solid first-quarter gain as signs of a nascent recovery in China bolstered the demand outlook.
Author of the article:
Bloomberg News
Yongchang Chin
Published Apr 01, 2024 • 1 minute read
Oil storage tanks in Osaka Bay in Osaka. Photo by Buddhika Weerasinghe /Bloomberg
(Bloomberg) — Oil edged higher following a solid first-quarter gain as signs of a nascent recovery in China bolstered the demand outlook.
Brent for June rose above $87 a barrel after front-month prices surged by 14% in the first three months of the year, while West Texas Intermediate was near $83. China’s industrial activity rebounded in March to snap a five-month decline, stoking hopes that consumption in the biggest crude importer might be on the mend.
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Oil’s outlook “is bolstered by signs of economic recovery in China, the world’s leading oil importer, driven by a resurgence in industrial activity and factory output,” said Ravindra Rao, head of commodity research at Kotak Securities Ltd. Persisting geopolitical tensions are also supportive, he added.
Crude has rallied this year as OPEC+ cut back supplies to push prices higher and offset the impact of increased flows from outside the cartel. The group is expected to affirm its current output policy at an online review meeting scheduled for Wednesday. Oil has also been supported by Ukrainian attacks on Russian energy infrastructure and elevated tensions in the Middle East.
Unexpectedly resilient oil demand in Europe was also helping prices, Goldman Sachs Group Inc. said in a note, adding that softness in US supply growth, and a possible extension of OPEC+ cuts through 2024, were also bullish. Last month, the bank said commodities would advance this year as central banks slash interest rates, aiding industrial and consumer demand.
Trading volumes are likely to be thin in the week’s opening session, with many economies including the UK away for Easter Monday.
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